IAS 7 para 14, IAS 16 para 68A, purchase and sale of rental assets treated as operating cash flow and sales as revenue

Atlas Copco AB – Annual report – 31 December 2018

Industry: manufacturing

  1. Significant accounting principles, critical accounting estimates and judgments (extract)

Rental operations

Rental income from rental equipment is recognized on a straight-line basis over the rental period. Sale of rental equipment is recognized as revenue when the significant risks and rewards of ownership have been transferred to the buyer. The carrying value of the rental equipment sold is recognized as cost of sales. Investments in and sales of rental equipment are included in cash flows from operating activities.

Consolidated statement of cash flows (extract)